Is austerity at an end?

Inclusion London response to the Autumn 2018 budget announcement

Posted: 1 November 2018

The Chancellor, Philip Hammond gave us some big headlines – “Austerity is coming to an end” and “an economy working for everyone” – but did he deliver a budget for Deaf and Disabled people? We examine the autumn budget 2018 to see if austerity is really ending and what measures will impact on Deaf and Disabled people.

To end austerity for many Deaf and Disabled people the Chancellor would have to abolish the Welfare Reform Act 2012 and the Welfare Reform and Work Act 2016 and reverse all the public spending cuts since 2010 – the Conservatives will never agree to do this – so no austerity has not ended.

Philip Hammond did promise more funding to some areas, which is welcome, but promises have been built on the predictions from the Office of Budget Responsibility (OBR), who have admitted that their previous forecasts were wrong. Also the promises of extra funding could be reversed in a Spring Budget if there is (post Brexit) an economic down turn.

But let us go along with the Chancellor who was in the mood for bringing rabbits out of the hat and look at the key measures he introduced of interest to Deaf and Disabled people:

Mental health

The 10 year plan for the NHS will now include a new mental health crisis service, which will provide:

Comprehensive mental health support available in every major A&E

More “safe havens” in the community

A 24-hour mental health crisis hotline.

More mental health ambulances.

Children and young peoples’ crisis teams in every part of the country…

This measure was not costed so how much funding will be provided for this new service is not known yet.

Universal credit (UC)

The Chancellor said that “Universal Credit is here to stay” and provided additional funding he said to make UC a “success”. The measures include:

UC work allowances will be increased by £1,000 per year from April 2019, benefitting Deaf and Disabled people and 2.4 million working-families-with-children by £630 per year. Work allowances are the amount that can be earned before the UC taper rate applies.

A package of additional measures worth £1 billion over 5 years to enable the introduction of additional protections for existing welfare claimants as they move onto UC.

People who receive the Severe Disability Premium (SDP) and who would have naturally migrated to UC will now only move to UC when they can receive transitional protection. This measure will be effective from January 2019.

Tax Credits claimants with capital in excess of UC’s £16,000 capital limit (who are not otherwise eligible for UC) will now have their transitional protection and UC eligibility time-limited to 12 months from the point at which they manage-migrate to UC. This measure will be effective from July 2019.

The Minimum Income Floor (MIF) will now apply to all gainfully self-employed UC claimants after a 12-month grace period, whereas previously only certain claimants received a start-up/grace period.

Managed Migration, which is the process by which the Department for Work and Pensions (DWP) will move people to UC from the existing benefit system will start in January 2020 and will end in June 2024 rather than September 2022.

Inclusion London’s comment:

Many Deaf and Disabled people would like UC to be stopped and scrapped so it is disappointing that the Chancellor confirmed that UC is here to stay but not a surprise. While many of the measures are welcome they do not introduce the structural reform needed. For instance the 5 weeks waiting period for the first UC payment, which throws many people into debt, so that use of food banks has increased in areas UC has been rolled out, remains in place. The inaccessible digital application system continues so many Deaf and Disabled people cannot apply without support, which is in short supply. Also there are huge concerns that the transitioning process to UC could leave Deaf and Disabled people without benefits.

Social care and support

The Chancellor said the Green Paper on the future of Social Care will be published “shortly”. Meanwhile he promised a further £650m of grant funding for English Authorities for 2019-20, but did not mention whether it would be ring-fenced for adult social care. However, he did say the government would invest a further £84m over the next five years allowing councils to improve services for “people with disabilities” and older people and to expand the Children’s Social Care programmes to 20 further councils with high or rising numbers of children in care.

Housing

An additional £45m for the Disabled Facilities Grant in England in 2018-19 was introduced by the Chancellor and is welcome.

The Housing Revenue Account cap will be removed so that councils can help to build the homes needed.

A further £500m for the Housing Infrastructure Fund, to “unlock 650,000 homes”.

Education

The Chancellor announced a £400m in-year bonus “to help our schools buy the little extras they need” It will be a one-off capital payment directly to schools, averaging £10,000 per primary school and £50,000 per Secondary School.

Inclusion London comment: Because of cuts in funding many schools have had to cut many teaching assistants, including those that provide support needed by Deaf and Disabled children. This funding is £20 million less than the amount provided to mend potholes and will not enable schools to replace the teaching assistants, so we doubt schools will feel that austerity has ended. Also there are other areas such as the police and prison services where funding has not been increased so the impact of the austerity cuts will continue.

Minimum wage

The minimum wage will rise by 4.9% from £7.83 to £8.21, which is welcome.

Income tax

The Personal Allowance will be raised to £12,500 and the Higher Rate Threshold to £50,000, before indexing both in line with inflation from 21-22.

Inclusion London comment:

It is shocking those on the highest incomes are getting an income tax cut, when Deaf and Disabled people will continue to bear the brunt of austerity through the government’s welfare reforms. Austerity will not end for Deaf and Disabled people struggling to pay for food, rent and fuel because of the long wait for the first UC payment or because of a sanction wrongly imposed, while the rich will get richer with the introduction of a higher tax threshold. Also raising the personal allowance does not help those on the lowest incomes.

The Chancellor announced a full Spending Review next year, when government’s priorities for public spending will be set out and longer-term funding decisions made.

So how should we view the rabbits the Chancellor brought out of his hat in this year’s autumn budget? Possibly much like any other magic trick, as it is possible his rabbits will all disappear with the need for new measures in a full spring budget in 2019 because of a post Brexit economic downturn.